3 Things to Loathe About Apple

LONDON -- There are things to love and loathe about most companies. Today, I'm going to tell you about three things to loathe about U.S. tech titan Apple (NASDAQ: AAPL) .

I'll also be asking whether these negative factors make Apple a poor investment today.

DNA"Innovation is in the company's DNA." Apple is the company to which this cliche is most frequently applied. It's a comforting idea for fans of Apple to believe that innovation is hard-wired into the business and that it will always continue to innovate, as if that's its biological destiny.

The idea is rubbish, of course: Nurture, not nature is responsible for innovation. And the environment within a business that nurtures innovation can easily change for the worse.

In its heyday, ICI was a top-three global company and one of the greatest innovators around, creating polythene, perspex, and Paludrine (the first really effective synthetic treatment against malaria), among a host of game-changing products. Innovation was in ICI's DNA -- except one day it wasn't, and the business went into decline.

Loss of JobsHow important was Steve Jobs to Apple's success? It's only been 18 months or so since the death of the company's charismatic leader and we don't yet know.

It takes a good few years for a new Apple product to get from conception to market, so the mystery new product category the company is currently talking about, in which it expects to launch later this year, will still have come from Jobs's vision.

We won't discover until a next generation of Apple products whether the company, post-Jobs, has the same degree of innovation and instinct for what will ring up big dollars in the marketplace.

Analysts still love AppleDespite the decline of Apple's shares over the past nine months -- from over $700 to around $430 -- the majority of analysts are standing by the company, recommending it as a buy or strong buy. In the most negative roundup of recommendations I've seen, just two out of the dozens of City experts that cover Apple have it marked down as a sell.

I prefer to see the market and the analysts bearish on a company before rating the stock a possible "darkest-hour" contrarian opportunity.

A poor investment?The City experts are by no means always wrong, and on the face of it, Apple's stock does look cheap. At a share price of around $430, the company is on a price-to-earnings ratio of 10.8 for the year ending September 2013, falling to 9.7 the following year -- and that ignores the $153 a share in cash on the balance sheet.

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This article's title is so provocative and its content so superficial as to be little more than link bait, which is something I didn't expect from the Motley Fool. If you look at the three reasons given, none of them are any reason to loathe Apple in any objective sense. There are actual reasons to be careful with Apple as an investment, but they're not discussed. Seriously, what is the point of this article other than getting people to download the entirely unrelated 5 Stocks report?

Maybe I can't count but that doesn't seem like three things. Innovation and Jobs death seem tied to one another (in the author's view). Apple spent 3.4 billion on research and development in 2012. Jobs died in 2011.

"It takes a good few years for a new Apple product to get from conception to market, so the mystery new product category the company is currently talking about, in which it expects to launch later this year, will still have come from Jobs's vision."

True. Apple were developing the iPad since 2000.

We could be well into the 2020s before we know for sure that SJ truly managed to redesign Apple with innovation in its DNA.

And then there will be the argument that its just momentum, and it'll all fall flat in the 2030s. And maybe it will. But if it doesn't, then it'll be certain proof of doom in the 2040s

"If you already have Apple tucked away in your portfolio and are looking for blue chip shares in other sectors, you may want to help yourself to the very latest free Motley Fool report. You see, the Fool's top analysts have identified a select group of FTSE 100 companies that they believe will deliver superior long-term capital and income growth."

Superior is a relative term and in this context implies better than Apple's.